According to Forbes, 57 million Americans, or 36% of American workers, participate in the gig economy. That was in 2018.
Per another analysis, if the economy keeps growing at its current rate, more than 50% of Americans will participate in it by 2027. And in a 2016 survey conducted by Lawrence Katz at Harvard University and Alan Krueger at Princeton University, 94% of the jobs created between 2005 and 2015 fall in the “gig” work category. In other words, the number of unconventional workers, including temporary help agency workers, on-call service providers, contract employees or freelancers, increased from 14.2 million to 23.6 million.
Many point to companies like Lyft and Uber, which allow app users to get a ride on demand and drivers to moonlight on their own schedule, for revving up the gig economy. However, the aforementioned Harvard study attributes less than 0.5% of the contingent workforce to mobile apps.
Brenda Axon, a 20-year Manchester resident, is a more typical “gig” worker. A retired nurse, Brenda tutors college students in the evenings, is a contract worker with a local hospital, and rents her Gorham farmhouse through Airbnb.
As the gig economy has gained greater dominance, a critical concern has been what protections are available to workers. The vast majority of gig workers are classified as “independent contractors,” not employees, and do not have the right to unionize, aren’t protected by harassment policies, and face difficulties accessing health-insurance.
This year, workers’ rights, the economy, and wealth distribution are focal points in the campaigns of progressive Democratic candidates, particularly US senators Bernie Sanders and Elizabeth Warren, and businessman Andrew Yang. But do the candidates have a clear policy for government reform that integrates the new nature of business and protects gig workers?
After hearing the candidates speak, researching their published plans, and communicating with campaigns, the results are in and they are mixed.
According to Diane Mulcahy, an associate professor at Babson College, a key impediment to the protection of gig workers is outdated government policies. Currently, the US labor market supports one type of working: a full-time employee, in a full-time job, for a single employer.
Two states that are key to in presidential contests adhere to this model and have recently adopted legislation to reinforce the unprotected status of independent contractors. In Iowa, Republican Gov. Kim Reynolds signed a bill into law in 2018 that defines workers as “independent contractors” if the “designated marketplace” does not specify which hours workers must be on the job. Under this legislation, anyone with a flexible schedule can be considered an independent contractor.
New Hampshire’s legislation also differentiates between an employee and “sub-contractor,” and does not obligate employers to provide healthcare, benefits, or the right to unionize.
Candidates and the gig economy
Off the bat, universal healthcare is a policy shared by progressive Democratic Candidates that would support the entire American workforce. However, key candidates’ overarching economic policies that aim to protect workers’ rights and tackle job losses are suited to a “pre-gig economy” framework.
Both Bernie Sanders and Elizabeth Warren focus on unions, creating a living wage for workers and building protection mechanisms in the workplace. However, neither present policies that effectively tackle the gig economy nor address protection of gig workers.
Alternatively, Andrew Yang’s campaign focuses on preparing the American workforce for the technological revolution by investing in education, infrastructure, and provision of technical skills. While Yang also fails to outline protection mechanisms for gig workers, his Freedom Dividend and focus on technical apprenticeships could be considered steps in the right direction.
In 2018, Bernie Sanders proposed the Workplace Democracy Act, a bold plan to promote workers’ rights through unionization, which links declining unionization rates to rising inequality. Critically, Sanders’ plan would guarantee the right to unionize, a minimum wage, and basic workplace protections. While Sanders’ plan goes further than any candidate in protecting worker rights, it fails to grasp the essence of the gig economy. The majority of gig economy workers do not have an established place of work, juggle more than one contract, and rely on the internet for work and wage standards.
Given these realities, it is unclear how unionization would really work to protect gig workers. There are unofficial rumblings among Sanders staffers that the candidate would create a collective bargaining system with wage boards to set minimum standards across industries. But while the creation of cross-industry standards may aid some gig workers, the long-term efforts towards implementation and monitoring are vast. Importantly, many gig jobs are neutral to such efforts, as pay is determined per job, scope of work, and industry. Take journalism freelancing, for example.
Like Sanders, Warren’s Empowering American Workers Plan proposes unions as a mechanism for redistributing wealth, creating jobs, and supporting workers. Asked about the pressing needs of gig workers, the Warren campaign referenced us to the candidate’s Part-Time Workers Plan. This proposed policy would provide benefits to part-time workers who have been with a company for at least 12 months.
In addition, Warren’s plan would require organizations with 15 or more employees to give two weeks’ notice for their shift schedules. While that would potentially address the percentage of sub-contractors with long-term work arrangements to one agency, many do not meet those specifications. In addition, the nature of the gig economy is not amenable to Warren’s policies. For example, UpWork, Fiverr, and Movidiam are popular online platforms where subcontractors’ rates, schedule, and scope of work are dependent on projects, not company or industry.
Yang shares Sanders and Warren’s affinity with unions to protect workers’ rights. However, his campaign differs from fellow Democrats in its willingness to face the problem of job losses in America to automation and artificial intelligence (AI). This is not surprising given Yang’s background as an entrepreneur.
At a Manchester town hall meeting held on Feb. 8, Yang pointed to examples of Walmart, Waymo, and call centers where Americans have and will face job displacement from automation. The candidate’s warning about losing the AI war with China was equally dire—Yang’s response to these pressing concerns is famously to give each American citizen a Universal Basic Income (UBI) subsidy, or Freedom Dividend, of $1,000 per month, which may be used for education, basic expenses and small business costs.
In reality, Yang’s Freedom Divided would provide a boost to gig workers to support continued skill development and provide basic income in-between contracts. At the same town hall meeting, when asked how he intended to support young professionals in the gig economy, Yang proposed instituting technical apprenticeship programs similar to the German model. The apprenticeship model and technical education align with views of noted experts on the gig economy and entrepreneurship.
According to Diane Mulcahy, universities and technical colleges should be teaching young people mind-set and skills development to succeed in the gig economy. Mulcahy, who wrote best-selling book The Gig Economy, maintains that the current academic focus on gaining on-full time job is a disservice to young people.
Similar to Sanders and Warren, Yang does not address the lack of protection mechanisms experienced by gig workers. On the other hand, compared to his opponents, the businessman-turned-hopeful’s policies account for the financial realities felt by gig workers as well as the need to prepare young people for the rapid economic changes taking place in America.
This article was produced by the Boston Institute for Nonprofit Journalism as part of its Manchester Divided coverage of political activity around New Hampshire’s first-in-the-nation primary. Follow our coverage @BINJreports on Twitter and at binjonline.org/manchesterdivided, and if you want to see more citizens agenda-driven reporting you can contribute at givetobinj.org.